The top executives at Merrill Lynch and Morgan Stanley, led by their chief executives, John Thain and John Mack, will not receive bonuses this year amid growing pressure on Wall Street chiefs to share the pain of the financial crisis. Morgan Stanley also became the first large US bank to announce that employees would be forced to pay back some of their bonuses if they caused the company significant losses, or reputational harm. Thain on Monday told Merrill’s board that neither he nor four other top executives, including president Gregory Fleming and CFO Nelson Chai, should receive a bonus. The move came after The WSJ reported that Thain had suggested to directors he deserved as much as $10m for his bonus. In a memo to Morgan Stanley staff, Mack said he and the company’s co-presidents, Walid Chammah and James Gorman, would forgo their bonuses, while the next tier of executives would see compensation plummet 75% over 2007. Lex meanwhile weighs up the pros and cons of bonus cuts for the chiefs. And Bloomberg reports Tuesday that top executives at Korea Investment Corp, Merrill’s fifth biggest investor, and Temasek, its biggest shareholder, said they still had faith in Thain despite the stock rout that slashed the value of their stakes and forced Merrill’s sale to Bank of America.

This entry was posted by Gwen Robinson on Tuesday, December 9th, 2008 at 5:49 and is filed under Capital markets, People. Tagged with john mack, john thain, merrill lynch, morgan stanley. Edit this entry.